Apple Working on a More Affordable iPhone Model

Samsung's strategy of flooding the market with mobile devices of different screen sizes and price points may have prompted Apple to consider a similar move this year as rumors are circulating that a more affordable iPhone model is in the works.

According to The Wall Street Journal, sources briefed on the matter claim that Apple is making progress on its plan to develop a more affordable iPhone model and could possibly launch it later this year. In order to lower its costs, Apple is said to be using a different and less expensive chassis for the device. Unlike the aluminum-clad iPhone 5, Apple could consider using polycarbonate plastic. Other hardware components could be reused from older iPhone models too.

Quoting information by a source familiar with the plan, Bloomberg also reports that Apple will be launching a smaller and cheaper iPhone in late 2013. Its source added that the plan for the more affordable iPhone started in February 2011, and Apple has spoken to at least one major U.S telcos about it. The iPhone model will cost between US$99 and US$149.

Supply chain sources informed DigiTimes that Apple will be rolling out a low-cost version of the iPhone in China and other emerging markets in the second half of 2013. Its sources have seen the sample of the device, which is alleged to come with a larger display and a brand new chassis.

Apple will lose its grip on the smartphone market if it does not deal with the fierce competition posed by its arch rival, Samsung which has become the world's largest phone maker. Samsung is also targeting to ship more than 500 million phones this year. With the sales of the iPhones contributing more than half of Apple's annual profits, this is definitely not good news for the company.

However, Apple prides itself on focusing on a few key products and is unlikely to compete in the lower end of the market segment. It is possible that Apple could scrap the plan.